This Sunday is the 10th anniversary of 9/11, which, by any account, was a momentous event in American history. In the post-World War II period, never before has the USA suffered such a massive loss in human lives and properties. The total cost to the USA has been estimated by the New York Times at a whopping $3.3 trillion, including $55 billion from the loss of lives and materials. While not all of the costs have been borne by the government — and some are still to come — this total equals one-fifth of the current national debt.
Here is the breakdown of the estimates. In 2002, the New York City comptroller's office estimated the cost of replacing destroyed and damaged property at $26 billion. And another $29 billion was estimated for the value of life and injury. The estimates of the economic impact of the attacks ranged from about $40 billion to $122 billion in a group of studies led by the CREATE Homeland Security Center at the prestigious University of Southern California. John Mueller, a political scientist at Ohio State University, and Mark G. Stewart, an Australian engineer, have estimated the increase in spending of $589 billion for homeland security and non-war-related national intelligence since 2001. The estimate of total war funding by the Congressional Research Service including wars in Afghanistan and Iraq, as well as medical care for veterans, is $1649 billion. The estimate of war funding from 2012 to 2016 and the cost of caring for veterans over the next 40 years is $867 billion (of which $55 and $223 billion are expected to be spent for Iraq and Afghanistan, respectively).
We are also told that the total cost on the al-Qaeda side to bring this massive loss to the USA was less than half a million dollars. That is, the USA has spent about $7 million for every dollar Al Qaeda spent planning and executing the attacks on 9/11. Knowing that only a tiny fraction of the $3.3 trillion cost figure to America owes it to the loss of lives and properties suffered as a result of the attack, it is high time to ask was George W. Bush’s decision to launch the two pyrrhic wars justifiable?
The wars are still raging. As a mater of fact August 2011 has been the deadliest month for U.S. forces in Afghanistan since the conflict began nearly 10 years ago with 66 US troops dead this month. This includes the deadliest attack on US forces since the beginning of the conflict, when 30 US service members, including 17 Navy SEALS, were killed when Taliban forces shot down their helicopter.
What is worse: there are unconfirmed reports that al-Qaeda is again seeking to harm Americans and in particular, target New York and Washington to avenge for the death of their martyred leader! Acutely aware of these factors, law enforcement around the country had already increased security measures at airports, nuclear plants, train stations and other important places. The latest threat has also prompted the U.S. embassies and consulates abroad to boost their vigilance in preparation for the anniversary.
In the nearly 10 years since 9/11 a lot of money has been spent in America on reducing the risk of another major terrorist attack. It is clearly time to compare the cost of security measures with the benefits as tallied in lives saved and damages averted. A security measure, as rightly noted in their study by Mueller and Stewart, is cost-effective when the benefit of the measure outweighs the costs of providing it. The benefit of a security measure = (probability of a successful attack) x (losses sustained in the successful attack) x (reduction in risk). The "probability of a successful attack" is the likelihood a successful terrorist attack will take place if no new security measures are put in place, and "reduction in risk" is the effectiveness of the new measures to foil, deter, disrupt, or protect against a terrorist attack. The same equation can be used to calculate how many attacks will have to take place to justify the expenditure.
Mueller and Stewart assumed that the total reduction in risk was 95%, and also applied the 2010 foiled attack in New York City to cost effectiveness equation. In 2010, a vigilant Muslim street vendor working in New York City largely averted a terrorism attack by a vehicle bomber in Times Square. Had the bomber been successful he might have caused a dozen fatalities with loss of life and property damage worth $100 million. The result was that for the counter terrorism spending since 9/11 to be fully justified, homeland security would have had to deter, prevent, foil or protect against 1667 Times Square style attacks a year, or more than four a day.
Mueller and Stewart, similarly, evaluated the 2005 attacks on underground trains and a bus in London that killed 52 people and injured many hundreds of commuters and passers by. The losses from such attacks would not exceed $5 billion. In their estimate, for enhanced security measures to be cost-effective for attacks of that magnitude, their rate of occurrence without those enhanced measures would have had to exceed 30 a year. If one posits that such an attack is thwarted once a year -- a conservative threat-likelihood by any measure -- the ratio of benefit to cost is a meager 0.03 meaning that spending $1 buys only 3¢ of benefits. For a terrorist of the magnitude of 9/11 costing $200 billion, the enhanced expenditures would be cost-effective only if that sort of attack would have occurred more than once a year.
Bottom line: the frequency and severity of terrorist attacks are so low that the benefits of enhanced counter terrorism expenditures of a trillion dollars since 9/11 are not justifiable by any rational and accepted standard of cost-benefit analysis. As the authors of the study noted, instead of saving lives, extravagant homeland security spending is, in a sense, costing lives. In the past month over 320 people were killed by tornadoes in the US, and yet there are studies that show $200 million spent subsidizing the purchase of tornado shelters for mobile home owners could have saved 30 lives during the life of the shelters. These are guaranteed lives saved for a modest government investment. There are other examples ranging from air bags to smoke alarms to pharmaceuticals known to save many lives. The authors opine that diverting even a small proportion of homeland security spending to such measures could save many lives at a fraction of the cost.
These findings are not much different from the conclusions reached by other studies conducted earlier. Virginia Tech public policy professor Patrick Roberts wrote in the Review of Policy Research in 2005, the creation of Department of Homeland Security (DHS) was "an example of the triumph of symbolic and distributive policies over more straightforward attempts to address the real problems of homeland security."
When the DHS was formed, it absorbed 22 disparate agencies, cramming them into a single, 230,000-person mega-bureaucracy. Without a clear overall strategy, the grant money DHS was responsible for allocating went out to states regardless of their needs. Huge defense contractors took advantage of the easy funding to pitch untested products. "It opened a floodgate of money for private industry to sell scanners and other devices," said Charles Perrow, a Yale sociology professor who has called the creation of DHS "The Disaster After 9/11."
In 2006, the House Oversight and Government Reform Committee identified 32 DHS contracts "collectively worth $34.3 billion that have been plagued by waste, abuse, or mismanagement" during the first five years after 9/11. In 2008, the House Committee on Homeland Security listed $15 billion in failed contracts since the department's founding.
The USA is on a high alert now. This yearly ‘al-Qaeda fear factor’ is costing the USA today billions of dollars, pushing it more and more into a debtor country. Unless corrective actions are taken, the USA cannot avoid the fate embraced by King Pyrrhus of Epirus in 279-280 BCE: ‘one more such victory would utterly undo him.’
Is the US government ready to learn from history and amend its ways to avoid a repeat of 9/11?